Thursday, September 6, 2007

Smoked Out

I have my loss limit set at $1000 now. If I lose $1000, I just can't place any more trades, my system locks me out.

I was out by 1:00 today.

Here's what happened.

The day started off fine, as I made some quick money on small long positions in LNN and EXM. However, by about 9:40, my luck had changed.

Even though the market was selling off in the morning, I was just shorting the wrong stocks. That is, I was shorting the strong ones. Shorting strength is just not a good idea.

I lost money shorting CROX early and then during the lunch hours, shorting VMI. Why did I short VMI, a strong stock? Because I was long LNN when it tanked out of the blue and so I thought VMI would follow. So, I got killed on both trades, my LNN long and my VMI short. Here are the charts.



So I got short VMI at around the same time because since LNN was tanking, I figured VMI would follow. Bad assumption.



Anyway, so as you can see, I covered a good portion of my position but I still had 400 shares short when it finally began to drop. When it got down to $88.20, my loss was less than $1000 again and so I took the opportunity to enter some new shorts. I was filled at $88.30. So I guess it's a little early to write this post.

The market looks to be dropping a little and this stock is finally acting weaker. It's 1:32 and I'm down $890. To be continued...

LATER...

Okay, so guess what, I finished at -$887. I should have walked away... instead I blogged like a lunatic and watched "The Dark Crystal" that Jim Henson movie from the early 80s.

I make $3, you get fun blog posts for free. Go figure.

Also, since I had time to kill, my daughter read me Fancy Nancy and Fancy Nancy and the Posh Puppy like, 400 times.

Back to the "markito." For fear of sounding like a broken record, I just want to point out that we rallied today but on very low volume. I don't want to sound like a "bearshitter" for fear of getting my "eyebrows punched off" by "the Fly," but if I was a bull I'd be a little concerned about the lack of volume in the market at these levels.

Also, one note. Since I did well last month I began to fund a second account with my company. It will be a swing account. The account I used to post here is now considered my "super long term" account. Like, I'm just not going to trade it, ever.

I will report my swing trades here from now on. I'm going to start extremely small with my trades as I've only thrown $2000 into the account to begin, but I hope to hold the stocks for weeks. We'll see. Hopefully some of you come up with some good long term ideas.

Anyway, here's the stats:

P&L, -$887
Best,
UBB, $182
Worst, CROX, -$423

26,600 shares traded.
15 stocks traded, 6 winners, 9 losers.
129 trades.

5 comments:

Woodshedder said...

Tip- get Walter the Farting Dog to read with your daughter. Go get it the next day your trading sucks. It is hilarious.

Woodshedder said...

Also if you start reporting your swing trades, I'll rejoin the VO.

Dinosaur Trader said...

Woody,

Walter the Farting Dog is a classic. It definitely works with a toddler's sensibilities. Right now my daughter's favorite joke is to insert the word "poop" or "poopy" into any sentence.

As for reporting my swing trades, I will be including them in my overall number however, I doubt they will be adding or taking away much for at least a couple of months. I will however, mention what I'm buying and selling in posts on the blog.

Of course, as one of my original invitees, I'd love to have you back in the VO. You let me know when you can take the heat again...

-DT

artha said...

DT,
How do you determine your entries? Do you look at candlesticks, chart patterns, or other indicators? Do you use hard stops or mental stops?

Thanks.

Dinosaur Trader said...

artha,

I use candlestick charts, yes, but I don't really "study" them. I trade a lot on "feel" and "emotion" that's why the volatility suited me.

I watch price, volume, and the direction of the general market. On my daily charts I'll pay attention to the 50-period MA.

I mix my stops up... sometimes I set them but if I only have a few positions, I'll make them mental.

I don't really have a "system" and I know that in the "blogosphere" at least that is odd. However, it's worked for 8 years.

In fact, I probably do have some system I just don't think about it much so I'd have a hard time describing it.

-DT